138 NI Act | Mere Claim of ‘Security Cheque’ No Defence Against Statutory Presumption : Calcutta High Court

“A person cannot issue a cheque of Rs.6,00,000/- when he has taken a loan of Rs.1,00,000/- only” –  In a significant ruling reaffirming the scope of the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, the Calcutta High Court dismissed a criminal revision challenging concurrent conviction of the accused in a cheque dishonour case, holding that “mere denial or bald plea of ‘security cheque’, without any cogent evidence, is insufficient to rebut the statutory presumption of a legally enforceable debt.”

Justice Ajay Kumar Gupta, exercising the revisional jurisdiction of the Court under Section 482 CrPC and Article 227 of the Constitution, upheld the conviction and sentence imposed by both the Trial Court and the Appellate Court for dishonour of a cheque amounting to ₹6,00,000.

The Court ruled: “This Court finds no sufficient or cogent reason to interfere with the concurrent findings of both the learned courts below. The petitioner has not been able to rebut the statutory presumption raised by the law in respect of the issuance of the impugned cheque by him in favour of the complainant.”

Presumption Under NI Act – Not to Be Shaken by Mere Assertions Without Proof

Justice Gupta began the judgment by framing key legal issues, notably whether there existed a legally enforceable debt, and whether the accused had discharged his burden to rebut the presumption under Sections 118 and 139 of the NI Act.

Rejecting the petitioner’s claim that the cheque in question was issued as “security” for a different, smaller loan from a third party (Palash Chatterjee), the Court found this defence to be “baseless and unsubstantiated.”

The accused admitted issuing the cheque but claimed it was not towards any liability to the complainant. However, the Court found this explanation implausible, noting: “A person cannot issue a cheque of Rs.6,00,000/- when he has taken a loan of Rs.1,00,000/- only.”

The Court further noted that the petitioner failed to produce any documentary or oral evidence in support of his contention that the cheque was given as security or that the complainant misused it.

“Unless such fact is proved with reasonable evidence, court cannot give importance of such contention,” the Court held.

Absence of Written Agreement No Ground to Deny Debt: Oral Evidence and Presumption Sufficient

A critical aspect raised by the petitioner was that there was no written loan agreement to prove the alleged loan of ₹6,00,000. However, the Court dismissed this contention, relying on settled legal principles and precedents.

“There may not be a written agreement but if there is a good relation between the parties, it can be safely accepted and presumed that the accommodation loan was given… and in discharge of his liability, the petitioner has issued cheque in the name of the opposite party no.1,” the Court stated.

The Court also emphasized that the complainant had fulfilled all legal requirements under Section 138 of the NI Act, including timely service of the statutory demand notice via registered post with acknowledgment due. The petitioner did not dispute the service of notice at the relevant time, nor did he reply to it.

Scope of Revisional Jurisdiction Under Section 482 CrPC is Limited – High Court Declines to Re-Appreciate Evidence

Reiterating the well-settled position of law that the revisional and supervisory jurisdiction under Section 482 CrPC and Article 227 of the Constitution is limited, the Court refused to re-evaluate the evidence or interfere with the findings of fact recorded by the lower courts unless there was a patent illegality or miscarriage of justice.

Justice Gupta observed: “The High Court, while exercising its supervisory jurisdiction, does not act as a court of appeal to re-appreciate or re-evaluate evidence adduced before the Trial Court… Interference is justified only when there is a patent error of law, a manifest miscarriage of justice, or where the findings are perverse or based on no evidence at all.”

Referring to authoritative Supreme Court precedents including Amit Kapoor v. Ramesh Chander and State of Haryana v. Bhajan Lal, the Court noted that its hands are tied where the findings are supported by evidence and consistent with legal principles.

Acquittal of Co-Accused No Shield for Principal Accused

Another significant observation was with respect to the acquittal of co-accused Smt. Madhumita Barui. The Court noted that no joint liability had been established against her and that the complainant had failed to bring any material to implicate her.

The Trial Court's acquittal of the co-accused was thus not erroneous, and the conviction of the principal accused (the petitioner) stood unaffected.Conviction Affirmed – Revision Dismissed

Dismissing the revision petition, the Calcutta High Court held that both the Trial Court and the Appellate Court had correctly appreciated the facts and law, and had rightly convicted the petitioner under Section 138 of the NI Act.

The conviction of two months simple imprisonment along with fine of ₹8,00,000 (with ₹7,95,000 payable as compensation to the complainant) was affirmed. The petitioner was granted 30 days to comply with the payment order, failing which an additional imprisonment of two months would follow.

“This Court does not find any illegality, infirmity or perversity in the impugned judgments. Consequently, C.R.R. 969 of 2015 stands dismissed,” Justice Gupta concluded.

Date of Decision: 28 January 2026